Does geopolitical uncertainty affect corporate financing? Evidence from MIDAS regression

Volume: 47, Pages: 100519 - 100519
Published: Feb 1, 2021
Abstract
This paper investigates the effect of geopolitical uncertainty on (market) leverage ratio, debt maturity, and choice of debt source. Using a new monthly index of geopolitical uncertainty and annual data for corporate financing variables, we find that under geopolitical uncertainty firms tend to reduce debt and increase market leverage. We argue that this increase is driven by asymmetrical reductions in the numerator (total debt) and the...
Paper Details
Title
Does geopolitical uncertainty affect corporate financing? Evidence from MIDAS regression
Published Date
Feb 1, 2021
Volume
47
Pages
100519 - 100519
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